Fed approves Chinese bank purchase of US bank

Wed, 05/09/2012 - 15:41 EDT - AP

WASHINGTON (AP) -- The Federal Reserve has for the first time given approval for a large Chinese bank to purchase a U.S. bank. It also gave approval to two other large Chinese banks to expand their operations in the United States....

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The Federal Reserve has for the first time given approval for a large Chinese bank to purchase a U.S. bank. It also gave approval to two other large Chinese banks to expand their operations in the United States.

The financials ETF XLF surged to its highest since October 2008 today ahead of the second part of the terribly dire stress test results: FED APPROVES 14 OF 18 BANKS' CAPITAL PLANS WITHOUT CONDITIONS But...

The financials ETF XLF surged to its highest since October 2008 today ahead of the second part of the terribly dire stress test results: FED APPROVES 14 OF 18 BANKS' CAPITAL PLANS WITHOUT CONDITIONS But...

By Seeking Profits:On Wednesday, the Federal Reserve released its annual Comprehensive Capital Analysis and Review ("CCAR"). This is the second part of the annual stress test where the Federal Reserve either approves or rejects major banks' capital plans (the full report is available here). This year, 30 banks were required to submit plans for approval, and 25 passed while 5 failed.

For the first time Canada’s loonie will join the U.S. greenback, euro and yen as official reserve currencies in International Monetary Fund data. The IMF said the Canadian and Australian dollar will be included in its Composition of Official Foreign Exchange Reserves from the third quarter. They’ve previously been included in an “other currencies” category in the COFER reports.

As market-watchers, nothing gives us heart palpitations quite like a meeting of the Federal Open Market Commission.
And fortunately, a big one is coming up this week!
But for most people, the Federal Reserve invokes confusion, derision, or nausea.

By Simon Johnson
To fix a broken financial system – and to oversee its proper functioning in the future – you need experts. Finance is complex and the people in charge need to know what they are doing. One common problem, which is also manifest in the United States today, is that many of the leading experts still believe in some version of business-as-usual.

BlindReason submits: Here's a very clear and lucid post explaining that Chinese dollar reserves cannot be used to forestall a Chinese domestic economic contraction. Whenever I bring up the possibility of a China bubble, people bring up the large dollar reserves by China. That would be a great point if China's currency was a free floating currency.